NO DEDUCTION FOR GIRLFRIEND’S CHILDREN

As a tax preparer, every year I have some tell me that they want to claim their girlfriend’s children since they lived with them all year and provided over 50% of their support. Well, here’s a real life example of why this theory will not fly with the IRS.

Dimitri Harris, his girlfriend, and her four children shared an apartment with another tenant. On his 2005 income tax return, Mr. Harris listed tow of the children as his niece and nephew, filed as head of the household, claimed a child care credit, the additonal child tax credit, and the earned income tax credit. The taxpayer later mailed two additional returns to the IRS for 2005 intending them to be amended returns. On the first amended return, Mr. Harris changed the identification of the two children from niece and nephew to adopted children, and then on the second amended return, he added the girlfriend as a dependent. The IRS rejected both amended returns and issued a NOTICE OF DELINQUENCY disallowing the filing status and deductions based on the children.

Mr. Harris was not married to the children’s mother, nor was he the father of her children. A taxpayer is allowed a dependency exemption deduction only if the claimed dependent is a qualifying child or qualifying relative under Tax Code §152 (c) or (d). None of the children met the relationship criteria to be the taxpayer’s qualifying child, a descendent of a qualifying child, or a brother, sister, stepbrother, or stepsister of the taxpayer or a descendent of any such relative. Nor did Mr. Harris provideany evidence to establish that he provided more than one-half of the total support for the two children. Also, it appeared from the record that the co-tenant paid at least half of the rent for the apartment. From Blanco v. commissioner 56 T.C. 512, 514-515 (1971), a taxpayer who cannot establish the total amount of support provided to a claimed dependent generally may not claim that individual as a dependent.

Without providing evidence that the children qualified as dependents for which an exemption could be claimed, Mr. Harris was denied dependent exemptions, head of household filing status, earned income tax credit, child care credit, and an additional child tax credit for his girlfriend’s children.

Dimitri Harris v. commissioner, TC Summary Opinion 2007-202